New Zealand and Sri Lanka to consider FTA

Reuters: New Zealand and Sri Lanka will open diplomatic posts in each other’s nations and are considering a Free Trade Agreement (FTA), the Pacific country’s Trade Minister said on Friday.

New Zealand Trade Minister Todd McClay and Prime Minister Ranil Wickremesinghe instructed officials to consider a framework to boost economic ties, which could result in a free trade deal, McClay said in a statement after the two met this week at the World Economic Forum in Davos.

New Zealand Trade Minister Todd McClay and Prime Minister Ranil Wickremesinghe - Pic by Pradeep Pathirana in Davos

“Sri Lanka and New Zealand are complementary economies. There is potential for greater trade both ways,” said McClay, and added that any deal could include “other like-minded nations.”

New Zealand, a small island nation heavily dependent on international trade, is closely watching developments as growing US protectionism threatens the Trans-Pacific Partnership (TPP) signed by 12 nations last year, which incoming President Donald Trump has pledged to abandon.

Wellington is focussing on getting a number of new trade deals and existing pact upgrades off the ground, including one with the European Union.

McClay has also said it would be “interesting” to see whether momentum builds around the Regional Comprehensive Economic Partnership, an Asian trade pact that includes China and India, if the United States pulls out of the TPP.

Trade with Sri Lanka is currently modest, at NZ$307 million in the year to October 2016. Sri Lanka is a major buyer of New Zealand’s main goods export, dairy products, with exports last year worth NZ$240 million.

Fonterra welcomes fresh trade and investment discussions with Sri Lanka

The New Zealand dairy product giant, Fonterra has welcomed the announcement that New Zealand and Sri Lanka will progress discussions on new trade and investment opportunities, including the possibility of a free trade agreement (FTA) down the track, the company said in a release.

The announcement came today after a meeting between New Zealand Trade Minister Todd McClay and Sri Lanka’s Prime Minister Ranil Wickremesinghe at the World Economic Forum in Davos, Switzerland.

Managing Director of Fonterra Brands Sri Lanka Sunil Sethi said “Sri Lanka is one of Fonterra’s most important markets. Anchor was introduced to the market over 40 years ago and we’ve been collecting milk from Sri Lankan dairy farmers since 1997.”

“We are also working hard to develop the local Sri Lankan dairy industry. We have a major investment program underway to help use our generations of dairy farming expertise to grow the local dairy industry that will uplift local farming communities and support the growth of our fresh milk products, which is a growing category. We see strong potential for further growth in trade from NZ, in local production and investment opportunities.

“We are pleased with the continued positive relationship we have here in Sri Lanka and would see an FTA as a logical extension of this relationship.”